Reliance Communications

Investor Presentation
May 2008

Forward looking statements Important Note

This presentation and the discussion that follows may contain forward looking
statements by Reliance Communications Ltd (RCOM) that are not historical in nature.
These forward looking statements, which may include statements relating to future
results of operation, financial condition, business prospects, plans and objectives, are
based on the current beliefs, assumptions, expectations, estimates, and projections of
the directors and management of RCOM about the business, industry and markets in
which RCOM operates. These statements are not guarantees of future performance, and
are subject to known and unknown risks, uncertainties, and other factors, some of which
are beyond RCOMs control and difficult to predict, that could cause actual results,
performance or achievements to differ materially from those in the forward looking
statements. Such statements are not, and should not be construed, as a representation
as to future performance or achievements of RCOM. In particular, such statements
should not be regarded as a projection of future performance of RCOM. It should be
noted that the actual performance or achievements of RCOM may vary significantly
from such statements.
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Contents
Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Reliance Communications

Our strategy
Pillars of our strategy
Continuously

Big ambition

strengthen
wireless base

High growth scale markets

Exploit capabilities
for scale growth in
related sectors

Long-term investment view

Strong execution

Leadership in high
growth markets
India and globally

Pro-consumer regulatory policy

Focused investment

Organic growth
backed by disciplined
investment approach

Motivated teams

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Reliance Communications

Strategy ensures high returns to investors

#1 network in India

strengthen
wireless base

Dual network strategy; quality network is 3G ready

Widest retail coverage; focus on customer care

Exploit capabilities
for scale growth in
related sectors

Exploit network assets largest tenancy capacity and

active network

Leverage back-end platforms, distribution, manpower etc.

DTH, IT services, BPO, Retail

Leadership in high
growth markets
India and globally

India: >50% mkt share in enterprise, among top two mobile

operators, fastest WiMAX growth

Global: worlds largest IP enabled optic cable to capture

Internet growth, widest WiMAX footprint, top 3 IDC
operators

Organic growth
backed by disciplined
investment approach

Growing coverage to cover 1 billion Indians

GSM launch leverages existing infrastructure

Focused global acquisitions Flag, Yipes, Ewave,

Continuously

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Reliance Communications

Wireless
-

Enterprise

Mobile (CDMA & GSM)

VAS (Mobile World)
Wireless Data
Fixed Wireless

Tower Infra

Tower (Infratel)
-

Enterprise

Wireless

Globalcom

RCOM

Globalcom

Multi tenancy towers (4x)

Pan- India coverage
Backhaul
Support systems

Retail

BPO

Home

Home
-

DTH (Big TV)

IPTV (Digital Home)

Internet Data Center

Broadband
Leased Line
Office Centrex
MPLS & VPN
WiMax

BPO

Retail
-

Reliance World
Reliance Mobile Store
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Submarine cable (FLAG)

Ethernet Data services
Long Distance (NLD/ILD)
Reliance Global Call
Reliance Passport

Expertise in Telecom,
BFSI, Utilities & Media
confidential

Reliance Communications
Unprecedented fast diversification and growth
journey

Wireless
Nationwide GSM + CDMA

Wireless
Worlds largest n/w
rollout cover 1 billion

Wireless
National CDMA +
GSM in 8 circles
Globalcom
FLAG in global
data market

FY 2006

Launched Classic
became #2 handset
brand
Enterprise
Leadership: >50%
market share
Globalcom
Falcon network to
access Emerging Mrkts
Strategic acquisitions
e.g. Yipes

FY 2007 & FY 2008

Enterprise
IDC Top 3 global player
Launch of WiMax
Globalcom
NGN expansion
Presence in 60 countries
(>90% of World GDP)
Home
National DTH service
IPTV service in Top cities
Exploit internal capabilities
BPO to become Indias
Top 3 player
Widest multi-format retail

(1,100 cities; >2.5 mn sq. ft.)

FY 2009

Indias largest integrated and converged company

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Reliance Communications

Strong growth multiple times since listing

FY 2009*

FY 2008
90%
CDMA

FY 2006

Tenancy capacity
(towers)

40%
CDMA
40K
(10k)

Customers

20 mn

Coverage

Fibre 165k RKms

(Domestic + Intl)

120k+
(36k)
48 mn
207k RKms

90%
CDMA +GSM
200k+
(60k)

70 mn

300k RKms

* Analyst estimates
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Reliance Communications

Strong intellectual capital

35 % professionals and 65 % other qualifications

Average age 29 years

Over 50,000 employees

Added over 11,000 employees during the previous year

Announced widest employee stock option plan in the industry

We bet on people
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Contents
Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Wireless Business

Targets the largest untapped population in the world

Low wireless penetration

Leading to strong revenue growth

140%

50%

122%
120%

40%

40%

100%

82%

80%

84%

89%
30%

65%

60%

19%

20%

41%
40%
20%

20%

10%

0%

0%
India China Brazil Japan

US

France

UK

7%
0%

19%

9%

3%

Japan France

UK

US

China Brazil

India

Source: Merrill Lynch Global Wireless Matrix, December 2007

Low penetration + High Revenue growth = Huge opportunity

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Wireless Business

Mobile subscribers in India to cross 500 mn in 3 years

50%

600
Mobile Subscribers (mn)

38%

400

GR
A
C

300

%
5
3
22%

30%

40%
530

444

250

200
9%
100

8.6

240
30%

8.0

230

348

8.2
220

256

8.0
10%

161

210

96
0

0%
2006

256

8.4

20%
14%

9.9

Subscriber additions (mn)

44%

Penetration

500

260

2007

2008

2009E

2010E

205

200

2011E

Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Mar-08

Mar

Year end March 31

Source: Industry estimates

even then there will be 800 mn unserved people in India

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Wireless Business
One of the fastest growing wireless companies globally

Among top 2 operators with 46 mn wireless subscribers

-

Prepaid subscriber additions drive growth - 90% of total subscribers

Key Performance Indicators

-

EBITDA margins among the highest in the industry - >40%...

despite among the lowest tariffs in the world

backed by high Minutes Of Usage 620 mn minutes per day

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Wireless Business

Currently national CDMA + Regional GSM player

RCOM will replicate its dual
service success nationwide
CDMA + GSM services
(1/3 of India)

RCOM Nationwide

Market share
18%+

Dual circle
Market share
30%+

Dual circles

#1 position in dual technology (CDMA & GSM) service areas

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Wireless Business

Worlds largest network roll-out being executed

24,000 towns

500,000 villages

90% population
coverage

Seamless Voice, multimedia, video and Internet

connectivity to one billion Indians

All towns in India with >5,000 population are

covered on RCOM network

Almost 100% population coverage in most of the

circles

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Wireless Business

Cape
x

for n
ew e
ntran
t:~
US$
10 b
n

GSM network exploits huge capex and opex synergies

Radio
Electronics

< 15% investment

Retail Network
Sales &
Distribution

Leveraged for
Multiple businesses
incl. CDMA +GSM

BPO + Call Center

3G Ready

IT Systems
Billing + CRM + SAP

Infrastructure
85% of capex is
Technology
Agnostic

Transport Backhaul + PoI

Passive Infrastructure

Nationwide GSM service at US$ 1.3 bn vs US$ 10 bn for new operators

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Wireless Business

Balanced portfolio CDMA & GSM

Technology
Advantages
Spectrum efficiency

Wireless Data capacity

Multimedia/Video capability

CDMA

GSM

Unlimited usage plans

PCO & FWP
Mobile internet dominance
ATM & PoS
Near 3G experience
GSM ecosystem - 75% of
Indian mobile sector

Handset range at all price points

High ARPU segment

In-roaming revenues:
Rs. 1,500 crore

International Roaming

Only company to leverage strengths of both technologies

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Wireless Business

Dual network offers additional market share levers

Existing growth
momentum

Monthly net adds of 8 mn subscribers

Impetus from network expansion in

semi-urban/ rural areas

Broad Market Segmentation

Retail/Family
Similar CUG family plans

Corporate Requirement
Cross technology
On-net plans: Unique
Service offering

Senior executives
GSM

Smart phones
International travel

Field force
RCOM CDMA

Large on-net talktime

Remote email access

RCOM will bring both segments on-net, driving customer value & stickiness

Mobile Number
Portability (MNP)

Customer churn

CDMA

GSM

Incumbent GSM RCOM GSM

Probability
Low

Customer has invested in Handset

High

Customer neither loses number

nor investment in Handset

Unique advantage: Competition cant replicate

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Wireless Business

Indias No. 1 Wireless Data Operator

Customer Experience
-

High speed internet across the entire network covering 15000 towns and 4 lakh
villages

Internet on the move major convenience for laptop users

Multiple times faster than dialup internet major benefit in small towns without
broadband coverage

As a result, data card customers tend to be higher ARPU than normal mobile customers
Market Share and Growth
-

Over 10 million internet enabled handsets and data cards on Reliance network

> 60% Market share in wireless data cards segment (PCMCIA + USB)

Growth driven by increase in laptop base in urban markets and PC base in small
town
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Wireless Business

Cost-effective communication solutions for all

segments
POS
terminals

Cost-effective ATM
connectivity to leading banks
Largest private PCO operator
with >2 mn installations &
>50% market share

Largest provider of wireless data

cards with coverage in 23K towns

Supporting nationwide commerce & connectivity

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Wireless Business

Multi-channel customer delivery system

World-class design , fit out & ambience

at 2,000 exclusive retail showrooms on

High streets/Malls
High Quality Reach & National footprint

through 3,000 distributors & 500,000

retailers
5,000+ Direct & indirect outbound sales

force to cater to customers at their

premises
Dimensioned to handle 25-30 mn sales

transactions annually

By far the largest retail distribution network in the industry

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Wireless Business

Key takeaways

Among top 2 players in the largest wireless opportunity globally

Largest coverage in the world: covering 1 billion

Widest distribution through >2,000 exclusive stores & 500,000 retailers

Nationwide GSM launch to fully leverage existing infrastructure

Full suite of services on CDMA & GSM addressing all customer segments

Expertise to replicate the success of dual technology circles across India

Sustained profitable growth momentum

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Contents
Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Reliance Infratel

Infrastructure Tenancy Slots Market

RITL Ground based tower

2G, 3G & BWA

700,000

400,000

RITL Roof top tower

200,000

2008E

2009E

2010E

Source: Industry Estimates

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Reliance Infratel

population
Spectrum scarcity vs.

coverage
Speed of deployment

Reduced cost of

service
Increase penetration

Growth

Regulation

Key drivers of
infrastructure
sharing
Financial
&
business
impact

Social
responsibility

Operator imperatives

Rural roll out

Government imperatives

Access large rural

Pressure on site

Growth drivers

GSM and 3G roll outs

Operator imperatives

Infrastructure sharing has taken off

sharing
Active sharing

allowed
USO scheme for

sharing
infrastructure

Capex burden
Profitability amid

falling ARPUs
Network quality
Focus on core

business

Infrastructure sharing All drivers are in place

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Reliance Infratel

Challenges for new entrants

Demographics

Addressing diverse population with different ethnic

backgrounds, geography, cultures, languages & religions

Various permissions are required at various stages from

starting a company, getting license/spectrum, creating
network, rights of way etc.
Putting up a tower alone requires 40 different
permissions from different Government departments

Government
Permissions

Execution/Expansion

Complex management of supply chain interface including

vendors, sub-contractors, local authorities, Central and
State Govt agencies

Formidable competition from 6-7 existing, well

established players
Significant upfront investment commitments in the range
of US $ 6-8 bn

Market Dynamics

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Reliance Infratel

New entrants cannot afford a delay

Cumulative cash flows for national roll-out (GSM)

Reliance Infratel

Cash break-even

for new entrants

advanced by about
2 years

20,000
Cummulative cash flows (Rs. Crore)

will help reduce

cost and reduce
time to market

25,000

15,000
10,000
5,000
0
-5,000
-10,000
-15,000
-20,000
2008

2009

2010

2011

Passive sharing

2012

2013

Standalone

2014

2015

2016

2017

Active sharing

Many new entrants in talks with us for infrastructure

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Reliance Infratel
RITL: the largest integrated telecom infrastructure provider
with 280,000 slots capacity by Mar10
Pan India network with a presence

in all 23 telecom circles

In 000s

Largest slot portfolio of 120 K

slots
Significant expansion build-out

of 23K new towers in FY08 and

24K in FY09

280
200

Highest tenancy capacity, can be

further upgraded at marginal cost

40
14
2007

120
37

60

2008E

2009E

Towers

Slot Capacity

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Reliance Infratel

Fast track project management & execution

Over 100,000 dedicated personnel deployed
7,000 engineers deployed for project

management and execution

20 Chinese factories working round the clock
~3,500 vendor teams committed for erection
40 state-of-the-art warehouses established
Dedicated logistics support for on-time delivery

Scale of wireless execution has not been seen previously

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Reliance Infratel

Ingredients for high returns to investors

Market developments post 5% private placement
- Increased visibility on new players entering the market

issued to new entrants)

(License has been

- Recently, start-up spectrum has been allocated to some of the existing

operators for their pan-India GSM operations

- Increased visibility on 3G operations in India

RCOM is the anchor tenant through various platforms: CDMA, GSM,

3G, WiMAX, etc

July 2007
Private placement
EV US$ 9 bn

Present
Post mkt developments
EV ?

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Reliance Infratel

Key takeaways

Highest tenancy capacity in the industry 280K slots by 2010

One stop shop for both passive & active infrastructure

- 4X multi-tenancy towers
- Fiber optic connectivity and full back-end support
- Full suite of services for tenants

Anchor customer driven strategy

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Contents
Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Globalcom

Axes of Growth for Global Business

io
n

Profitable Growth

Se

rv
ic
e

In

no

va
t

Customer Delight

Data Center
Managed Storage

Multi Pronged Growth for Reliance Globalcom

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Globalcom

Suite of leading brands and services

Wholesale

Capacity
Infrastructure
Managed
Bandwidth
Voice
IPLC, IP Transit,
MPLS (Layer 3)

Enterprise

Managed Ethernet
(Metro, WAN, VPLS)
Managed Premium
Internet
Web meeting
Audio Conferencing
IP VPN
On Demand
Hawkeye monitoring
Enterprise Solutions

Consumer

Managed
Services

Wireless

Virtual Calling Card Managed Contact

Center
Global Roaming
Managed Storage
Managed Networks
ADN , CDN
Managed Network

Wide portfolio of leading brands and services

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Globalcom

Profitability already ahead of many other industry

All figures in US$ Mn
leaders
36%
26%

28%

28%

18%
16%
2007/ FY08
EBITDA %

15%
4%

consolidated

Source: Analyst reports, Company Analysis

Amongst Front runners in Profitability

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Globalcom

We have only scratched the surface of the market

potential for Reliance Globalcom
Services Provided

2007F Global Market Demand ($bn)

Typical
margins

Managed Services
Consumer

$95 bn

$85 bn

$95 bn

$95 bn

45%65%
15%30%

Enterprise
Wholesale
Sources: Telegeography, Yankee Group, Gartner Research

$5 bn

$90 bn

$90 bn

$90 bn

30%55%

$5 bn

$5 bn

$5 bn

15%35%

Past scope of services

Addressable market revenue is ~US$ 275 bn with EBITDA in range of

15% to 65% based on service and geography
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Globalcom

Reliances acquisition of FLAG initiated a transformation

9
8
8
9
8
8
9
8
8

Large Network
Global Connectivity
Emerging Market
Strength
Infrastructure & Capacity Services
Channel Partner Strategy
Managed Connectivity & Consumer Svcs.
Experienced Operations Team
Scalable Low Cost Operations
Conservative Balance Sheet

9
9
9
9
9
9
9
9
9

Reliance Globalcom stronger, faster growing, more dynamic company

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Globalcom

Transformed into Global Service Delivery Platform

Managed Contact Center

d
ste ons
Ho cati
pli
Ap
LC
IP

MP
VP LS
N

et
Mgd Ethern

Managed
Services

Audio Conferencing
In
fra
str
y
t
i
uc
c
a
tu
p
a
re
C

IP Transit

Data Center

Virtual Calling Card

Ro
a
m
in

Managed Storage

From infrastructure provider to global service delivery

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Globalcom

Worlds largest IP enabled optic fiber cable

U.S. Metro

India Metro

99 87,000
87,000RKms
RKms
99 GDP:
GDP:US$
US$35
35Trillion
Trillion
(~85%
(~85%of
oftotal)
total)

Existing FLAG Global Network

NGN Expansion under progress

FY 2003

Current
(incl. FALCON + Yipes)

Post-NGN
(under execution)

55,000

87,000

137,000

Landing points (nos)

26

43

64

Countries connected

28

40

60

Intl Submarine & terrestrial (Rkms)

Only global network with presence in fastest growth market

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Globalcom

Extensive Metro Coverage in the U.S.

99 22,000
22,000Metro
MetroRKms
RKms

Seattle
Chicago
San Francisco
San Jose

Denver

Boston
New York
Philadelphia
Washington DC

99 GDP:
GDP:US$
US$4.6
4.6Trillion
Trillion
(~40%
(~40%of
oftotal)
total)

Los Angeles
San Diego

Dallas
Houston
Miami

We connects 14 Most Advanced Metros in the U.S.

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Globalcom

Our Data Centers

U.S.A, U.K., France, Hong Kong, Taiwan and India.

Northport

London Hosting Center

Skewjack
Plerin
Island Park
Paris
Hong Kong

325 Hudson

Taipei

Mumbai
Bangalore

Chennai

12 Hosting facilities in 6 countries with over 1 million sq. ft. colo space
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Globalcom

Products : Carriers - NLD

1 Duct

Multiple Intercity PVC Conduits to carry OFC

2 Dark Fiber

State-of-the-art high capacity DWDM transport

3 Co-location

Pan-India Carrier grade co-location equipped

with AC, DC power

Bandwidth
Capacity

5 MPLS VPN
6 Voice

Carriage

DIA

2 Mbps to 2.5 Gbps capacity with mesh topology

deployment
Point-to-point and point-to-multipoint MPLS
delivery across 174 nodes
Carry Inter-circle & ILD voice traffic
Direct Internet Access wholesale capacity sale
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Globalcom

Products : Carriers - ILD Voice

Global voice infrastructure and capabilities

More than 200 carrier relationships; 50+ countries direct routes

Market leader for India Inbound business

1st Indian ILDO to deploy NGN Voice infrastructure globally

Netherland
Spain
Austria France

London

Germanay

Canada

Japan

Switzerlan
d
Saudi Arabia

Belgium

Italay

USA

Russia

Bahrain
Qatar

UAE

China

Pakistan

Oman

Bangladesh
Malaysia

Sudan
Sri Lanka

South Korea

Nigeria

Hong Kong

Taiwan
New Zealand

South Africa

Australia

Leverage global reach and economies of scale

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Globalcom

Products : Retail - Reliance Global Call

Virtual calling services
-

from USA, Canada, UK, Australia, New Zealand, Hong Kong, Malaysia &
Singapore to over 200 countries

Travel Communication services

-

Calling Card

Global SIM

Call Transfer service

Addressing the Communications needs of the Global Consumer

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Globalcom
Unmatched our product, customer, and delivery capabilities
Capacity &
Coverage
Ethernet
leadership
Managed Svcs
Consumer Voice
Emerging mkts
Scalable
Delivery Center

We are comparable with AT&T, BT, Verizon on most Growth Drivers

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Globalcom

Unique play on the exponential growth of digital

application and content distribution spanning
developed and emerging markets

Leverage the Assets in ground to introduce new services in Vertical

Stack with marginal investment

Spectrum Bank in Emerging Markets

Close to Customer and understanding of Culture

Well positioned to be among Top 5 global players

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Contents
Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Enterprise Business

Underserved market: Provides strong growth

opportunity
Broadband market segment revenue (US$ bn)
US$ 13 bn

US$ 5.5 bn

US

bn

FY2006
Household

FY2010
SMB + SME

Enterprise

Source : Industry Report

Indian Market to grow by US$ 8 bn in the next 3 years

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Enterprise Business

RCOM: Best positioned to drive growth

> 850,000 buildings in top 44 cities to our

fiber network in 365 Biz Districts
Largest capability in an all IP MPLS enabled
Core network to serve > 7.5 mn Voice & Data
customers

Atlantic

Fiber
Ring

Meshed Core

Pacific

Most comprehensive range of products &

service in Voice, Data & IT infrastructure
services The Edge

Who do we Serve

Servicing over 870 of top 1000 top Enterprises

250 MNCs
50,000 SMB businesses
Over 1 mn access links

Indias leading provider of enterprise services

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Enterprise Business

Access to state of the art Network Infrastructure

Pan India, Convergence ready

broadband network

Largest & Integrated with RCOMs

nationwide/global network
infrastructure

Largest MPLS enabled core data

network with multi-modal traffic
capability

Resilient network delivering highest uptime across industry

Supported by 24X7 NOC and integrated backend systems

Size, architecture and capabilities unmatched in the industry

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Enterprise Business

850 of Top 1,000 Indian enterprises are our customers

FMCG Segment

Services Segment

Telecom Operators

FMCG Segment

Services Segment

Telecom Operators

Winning >50% of new business generated in the segment

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Enterprise Business

Established leadership among competitors

Key Strengths

Largest Centrex Implementations

Network architecture & capability

Superior product suite
Telecom + IT Infrastructure (IDC)
Most integrated systems
Dedicated account management

Service
provider

Single largest
implementation

No of 1000+
lines installation

19,500 lines

13

Bharti

1,200 lines

VSNL

400 lines

BSNL

500 lines

Reliance

Largest IDC Market Share (%)

Bharti- IBM
Net 4India
1%
6%
Sify
7%

VSNL
16%

Largest MPLS Market share

Service
provider

Others
8%

RCOM
62%

Sub
base

% Market
share

Access
technology

Reliance

300+

38%

FTTB, LMDS,

Sify

180+

26%

Wireless

VSNL

100+

15%

MMDS, Wireline

Bharti

60+

10%

Wireline

BSNL

55+

8%

Wireline

#1 service provider in the highest value-added product areas

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Enterprise Business - SMEs

WiMax is our access technology: Fastest subscriber

take-up
Received spectrum for top 10 cities in India
- >20K customers acquired in these Mumbai, Bangalore

and Pune

- Will launch services in Delhi, Kolkata, Chennai,

Hyderabad, Ahmedabad, Baroda & Surat by May 2008

Service offering
- Business internet for SMEs/SMBs
- Telecommute packages for work-from-home

professionals

- Basic internet package for high-end residential users

WiMax complementary with enterprise services operating on metro ethernet

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Enterprise Business - IDC

Reliance Internet Data Centers (IDC)

Reliance Data Centers are specialized facilities that host complex array of

IT hardware running Mission-critical software applications of its Customers

-

Extremely robust physical structure

Very High Power & Cooling requirement

Carrier Neutral, terminating all Telecom Networks including Public Internet

Overall, extraordinarily reliable, physically secure, highly scalable and

automated structures to offer 100% uptime to customers business

applications.

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Enterprise Business - IDC

IDC: > 60% market share in India

Six data centres with level 3 + accreditation

more than 2,60,000 sq ft of facilities space

Hosting > 20,000 systems and > 1400 terabyte

of information

Geographic redundancy
Wide & complex application hosted
Core Banking, ATM/ Internet Banking
- Complex ERP/ SAP Applications
- Complex Intranet/ Customized Apps.
- Large Messaging Applications
-

Largest in India by a long way

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Enterprise Business

Full service Telco

Cover all customer segments

Consumer
- SMB
- Enterprise
-

Service Providers covering full spectrum of services

-

Wireless Mobility, Data connectivity, Internet

Wireline - MPLS, Leased line, Internet
Hosting - Data centres, DR backup
Global connectivity - IPLC, Global MPLS
Collaborative - Audio conferencing, video conferencing
Entertainment IPTV

Fairly strong Enterprise Product Profile

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Enterprise Business

Key takeaways

Indias leading provider of Enterprise services

- >50% Market share

Built competitive advantages on State of the art infrastructure

- 3-4 times over next competitor

Largest IDC capacity in India

- will be among the top 3 in the world by March 2009

Fastest WiMax growth till date in India

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Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Home Business
Target one of the largest + fastest growing pay TV market
globally

>30% total HHs are served on C&S

in India, mostly Analog

400
350

TV HHs (mn)

300

DTH HHs
4%

250

Digital cable
HHs
1%

200
150
100
50

Ja
pa
In
n
do
ne
s
Th ia
ai
la
nd
Ko
re
a
Vi
et
na
Pa m
k
Ph ista
n
ill
ip
pi
n
Au es
st
ra
lia

Analog
Cable HHs
95%

U
S

In
di

Ch
in
a

2nd

Indias TV viewership is
largest in the
world at 120 mn HH
Total TV Penetration of 54% in India is
among the lowest

Addressability driving shift from

analog to digital
Industry expects DTH HHs share of
total C&S HHs to reach 40% vs 36%
for analog cable, in FY15

Potential to become one of the largest Pay TV markets in the world

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Home Business

Big TV (DTH) - to be launched shortly

Key service differentiators
-

More channel choice

Pure Digital viewing

32 Cinema channels

Easy program guide

Quick channel select

Interactive applications (iNews, iGames,

iCricket, etc)

Superior Mpeg 4 technology

Pioneering HD Experience in India

Pioneering DVR Watch when you want

Digital viewing experience will create revolution in TV entertainment platforms

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Home Business

BIG TV Interface: A league apart

BIG TV SELECT (Mosaic)

Zapper Guide

Guide (EPG)

Cinema (PPV)

Intuitive and intelligent viewer interface makes it easier and faster

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Home Business

Product miles ahead of any competing platform

BIG TV

Dish TV

Tata Sky

DD Direct

240+

140+

120+

40+

Technology

MPEG 4

MPEG 2

MPEG 2

MPEG 2

Exclusive movie channels

Up to 32

Up to 6

Up to 6

NA

Completely

Partly

NA

NA

No. of video channels

Flexibility to select package

Big TV Advantages
- Only platform to offer both prepaid & postpaid services
- Largest choice of Channels
- Latest technology
- Largest number of exclusive movie channels (Pay-per-View Movies)
- Best flexibility & choices for monthly subscription
- Easy to navigate

Technology + Content leadership = Greater choice & flexibility to customers

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Home Business

Leveraging Existing Infrastructure to maximise value

Billing System

Infrastructure
- Co-location

of
Broadcast
centre,
Up-link
infrastructure, Call centre Operation support systems

Billing & Collection, Business Processes

Sales and Distribution
- Reliance Web World, Web World Express, Direct

Selling Agents and other trade associates

- Largest distribution network of 2,000 exclusive retail

Web World

stores & >500,000 third party retailers

Leverage existing skill sets and common support

functions

Access to content from group companies like

Adlabs, Zapak, Big Broadcasting, Big FM, etc.

Uniquely positioned as strong synergies gives tremendous leverage

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Home Business

IPTV services to be launched initially in metros

IPTV to provide interactive TV &

Video services using our existing
Metro Ethernet network

To leverage last mile connectivity of

over 1Mn buildings

Exclusive alliance with Microsoft for

Indian market

First and only HDTV in India

Indias first multiplay platform to offer voice, data & TV entertainment

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Home Business

Key takeaways

At the forefront of the worlds largest opportunity in the home entertainment

sector

Similar to mobility inflection in 2003, Home Entertainment is on the verge now

- 225 mn H/H, 120 mn TV H/H, almost 75 mn C&S H/H
- but with a minimal 5 mn DTH penetration presents a huge opportunity for Big TV

Consumer needs of when to watch/ what to watch driving the DTH & IPTV
segments

Regulatory changes in our sweet spot

Only Integrated Entertainment and Only Integrated Telecom Player in India

- capable of doing multi-tier bundling to offer voice + wireless data + video services

Building operating efficiencies by leveraging RCOM/Group advantages

- pan India retail and distribution infrastructure
- IPTV launch on metro Ethernet
- opportunities for cross bundling across insurance, telecom, entertainment and other ADAG

segments.

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Contents
Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Retail Business

The Largest integrated multi-format branded retail entity

Telecom: CDMA & GSM handsets + airtime + accessories
Digital Broadband Services, making convergence a reality
Current

After Expansion

No. of Stores

2,000

5,000

No. of cities
covered

600

1,100

1.1 mn

2.5 mn

Sq. ft area

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Retail Business

Adding a New Dimension in Retailing Services Retail

Mobile Store

Broadband
Services

Entertainment

Financial
Services

Sales & Services for Handsets, Airtime & Accessories

Handsets of All major vendors + private label devices

High speed internet, Video conferencing,

Gaming, Digital services

e-Education, e-Recruitment, Knowledge
seminars

Sales & Services of DTH Kit, recharge vouchers

DVD on rentals

Sales & service of Life insurance, Mutual funds, PMS

Selling Reliance Money products like Online trading

A unique aggregated store-in-store model for host of services

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Retail Business

Who do we serve?
25 mn customer interactions @ retail
-

15 mn of Reliance Mobile customers for sales & services

10 mn for other businesses & services

Over 1,500 large enterprises & MNCs

-

for 20,000 hrs of video conferencing / month

Over 1,000 SMEs

Over 1.5 mn registered Reliance World users of Broadband Center
Usage of 8.5 mn hrs for Internet + Gaming annually
59 National TV channels
-

for 1000 hrs / month of News Gathering for broadcast

More customers than any other retailer in this sector

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Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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RCOM Financials

Consistent Performance
Quarterly Net Profits (Rs. cr)

Yearly Net Profits (Rs. cr)

6000

1,800
1,500

GR
A
C

1,200

%
93

1,503

5000

GR
A
C

4000

1,024

9
24

3,164

3000

900
600

5,401

2000
403

300

1000

0
4Q FY06

4Q FY07

444

FY 2006

4Q FY08

FY 2007

FY 2008

Net Profit - 12 times in just 2 years

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RCOM Financials

Key Performance Indicators

EBITDA Margin
45%

Net Profit Margin

30%

RCOM

25%

Bharti

40%

RCOM
Bharti

20%

35%

Idea

15%

30%

Idea

10%

1Q FY08

2Q FY08

3Q FY08

4Q FY08

1Q FY08

RPM (Rs)

2Q FY08

3Q FY08

4Q FY08

ARPU (Rs)
440

0.85

380
0.75

RCOM
Bharti

Bharti
RCOM

320

Idea

Idea
260

0.65
1Q FY08

2Q FY08

3Q FY08

1Q FY08

4Q FY08

2Q FY08

3Q FY08

4Q FY08

Among the best in Industry

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RCOM Financials

Among highest EBITDA margins globally

EBITDA Margins
60%

54.2%
47.8%

50%
38.6%

40%
33.2%

43.6%

41.6%

35.3%

29.7%

29.5%

28.1%

30%

41.4%

20%

10%

i
Br

h
tis

Te

m
co
le

Si

l
te
ng

Ve

on
riz

N
KP

&T
AT

ne
fo
a
d
Vo

a
tr
ls
e
T

i
rt
a
Bh

Re

e
nc
il a
a
in
Ch

Te

m
co
le

in
Ch

ile
ob
M

despite the lowest tariffs

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RCOM Financials

Strong Financial Platform

Total Assets

Rs. 73,811 cr

Net worth

Rs. 25,643 cr

Return on Net worth

33.7%

EBITDA Margin

43.6%

Net debt to equity at 0.39 potential to borrow US$ 13 bn for growth

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Contents
Reliance Communications an integrated telco

Wireless

Enterprise

Infratel

Home

Globalcom

Retail

Financials
Looking Ahead

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Looking ahead

RCOM: Looking Ahead

RCOM will have worlds largest network covering one billion people in more

than 23,000 towns and 500,000 villages including national & state
highways
Continue expansion to high growth DTH, Retail, BPO, IT services

exploiting internal capabilities

Continue to explore global M&A opportunities to further fuel growth on back

of disciplined investment strategy

RCOM is the most profitable telecom company in India with EBITDA margin

of over 43%
RCOM has an underleveraged balance sheet with the ability to finance

future growth through debt

Strong journey of growth continues

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Thank you